A parliamentary
panel has asked the government to formulate a concrete action
plan to recover tax arrears that have reached Rs 11.5 lakh crore.

The standing committee on finance (2017-18) has said that it is
"alarming" that the department of revenue seems to be caught up
in the vicious cycle of tax arrears.

ore than Rs 11.5 lakh crore (Rs 9,30,741 crore in direct taxes
and Rs 2,28,530 crore in indirect taxes) are outstanding in the
form of tax arrears, it said, adding this is almost the size of
an economy.

Considering the fact that tax arrears have been increasing year
after year, the committee recommended for "devising a concrete
action plan and a roadmap to clear the backlog through a time
bound fast track mechanism".

On direct taxes, it said that over 94 per cent of it has been
categorised under 'demand difficult to recover' and in indirect
taxes, only 22.84 per cent are said to be clearly recoverable.

It also suggested that tribunals and courts should be regularly
moved for early and expeditious hearing of cases.

The committee has also expressed concerns that over Rs 1.26 lakh
crore has been paid as refunds upto January this year, with
interest outgo of Rs 10,312 crore in 2016-17.

"This raises an apprehension that the assessees may be
constrained to pay excess advance tax to fulfil revenue targets
of the department," it added.

It said that there is an apprehension that this practice of
excess refunds may encourage connivance between tax officials
and assessees to the detriment of the department.

The committee asked for looking at reasons behind excess refunds
and accordingly take corrective steps.